Expectation : Bearish

Profit When : Down

Risk : Limited

Reward : Unlimited

Breakeven Pt : (Maximum loss / (number of long put options - number of short put options)) - Strike Price Of Long Put Options

Max Profit : Unlimited

Maximum loss = Total Premium Of Long Put - Total Premium Of Short Put

OppiE's Note : The purpose of a Short Bear ratio spread is to totally eliminate upfront payment for the ATM Puts through the sale of the ITM Puts. Since there are more ATM Puts than ITM Puts, the ATM Puts would eventually rise faster than the ITM Puts, resulting in a profit as long as the stock keep falling. Since nothing is paid for the position, it could also lose nothing if the stock rises strongly. Maximum loss occurs when the stock expires at the strike price of the ATM Puts.